Fuel and travel costs are pushing prices up again
Thursday 5 November 2026
Inflation has risen to 3.1%, meaning everyday spending is getting more expensive just as household budgets are already under pressure.
Tax expenditure
Support provided through a targeted tax break instead of a direct payment from public funds.
What it means
A government can support a group or activity by offering a tax relief, so those who qualify pay less tax than they otherwise would. Such a targeted relief is often called a tax expenditure: it works in some ways like spending money, but appears as tax revenue not collected. Not every tax-free amount is treated this way; some allowances are seen as basic parts of how a tax is designed. Estimating the cost of a relief does not tell you exactly how much extra tax would be collected if it were removed, because people might change what they do.
Example
Suppose a made-up scheme reduces a qualifying person's tax bill by £200 when they buy approved equipment. They pay £200 less tax rather than receiving a £200 grant. The scheme is an example of support through the tax system.
Why it matters
Looking only at direct spending can miss public support delivered by tax breaks. The way a relief is designed also determines who can use it.
Related terms
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Effective tax rate
The total tax someone pays, shown as a percentage of the income or other amount being measured.
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Fiscal policy
Government decisions about taxes, spending and borrowing.
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Personal allowance
The amount of income most people can receive in a tax year before paying Income Tax on it.
Read more -
Public spending per person
Public spending divided by the number of people it covers.
Read more
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News
Highlights from about the UK economy, the UK government and the UK public sector.
Mortgage relief will have to wait a little longer
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Wednesday 4 November 2026
A higher energy price cap means many households will be paying more to heat and power their homes during the colder months.
Guides and insights
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Clear, accessible analysis of the economic issues shaping everyday life
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Comparing the cost of everyday life across generations, from bread and beer to buying a home.
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What slower price rises mean for wages, purchasing power and economic recovery.
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Beyond GDP: how we could measure economic success through security, opportunity and living standards.
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